I like Gander but there may be a lot of gun owners that are like me who prefer to buy their guns from mom and pop gun shops/sporting goods stores so I wonder if Gander is benefiting from the uptick in gun sales. Also, in today’s Shooting Wire, Jim Shepherd writes about how the hunting firearms are still sitting on the shelves while the high capacity pistols and AR-style rifles are flying off the shelves. Shepherd says if a company is dependent on hunting, it is hurting.

It isn’t a hard thing to grasp that if they don’t fix it, they’ll go under. Angry customers lose you future customers, since they’ll tell everybody else every time the name comes up.

However, something tells me that massive markup has something to do with their poor performance in the past. Their current successes probably almost entirely stem from the build-up to the election, even back in Q3 (people were already buying more than in the past, even then). Once that tapers off, or is illegalized, I really wonder how well that store will do.

Also, I would think that Q3 would normally be a pretty good time for the chain. July-September? That’s a lot of prime outdoorsy time and leading right up to the hunting seasons. Now, Q1 might be a bit on the lean side normally…

I guess where I am still left scratching my head is whether your argument is that Gander is doing well because people are buying like made and it’s a bellwether for the industry that supports us, or if Gander is cutting like crazy, happened upon a profit because of it, but is in flux even though there are crazy high gun sales. (The first argument is made in the post, and you seemed to agree with me that they only crossed the profit line because of reductions in comments.) Because I think whichever side you take changes the fundamentals.

I guess what I’m trying to say is that I’d rather not see shooters lose an option to buy supplies and gear at; if Gander isn’t reporting 5 million in losses, but instead reporting profits that is a good thing. Now, I hope that they’re streamlining and laying off people so that they can be a more efficient organization, and not so they can pay some guy a ridiculously bloated salary.

Of course, what I’d really like to see is MidwayUSA open a bunch of retail stores.

Let’s say that they close up some shops around there and then some of their gun counter workers decide to go open a new gun shop to serve that market. That experiment is a better use of resources than throwing their talent and other people’s money into a hole that the big box store may never come out of. You could even argue that if the customers all just go to other big box sporting stores that those competitors now have more profits that could be shared with non-profit gun and conservation groups rather than hoping to pay off old Gander CEOs.

I’m not trashing Gander for the sake of talking smack about a store I personally didn’t like. I just think that there was a bigger picture that was lacking from the numbers, and I also think some pure economic thinking would add to the analysis. For example, what else could they do to cut costs to make that profit increase? What could they do that’s different to attract more customers? How can they innovate? They clearly need to do something different if they are having a hard time in a market that’s being very generous for gun dealers.

I hope that the streamlining is a good thing because having more companies out there does increase competition which is better for our consumers. However, if that’s how they made their profit, then that doesn’t quite fit with the initial argument that they are doing well because they are selling lots of stuff in the post. In that case, I think there’s a more interesting story to tell and to get people engaged in.

And yes, both of our observations are anecdotal, something that I also noted in my post when I asked folks if the things I observed were national policy or just because the Cabela’s we go to is near Philly and Jersey. That may well be a smart decision on their part to become less gunnie, and I would say it’s fine for them to make those changes. We’ll just shop around and send our resources to the company that now serves our needs the best.

The statement I linked shows that while their retail segment had a 1.6% decrease in gross sales from Q3 ’07, because of their cost cutting they were able to make that into a 3.7 million dollars of profit from the retail segment, which means at the corporate operations level, they still have $3 million in bloat that’s costing them money (assuming no additional revenue streams, for funzies).

Now, if they’re cutting corporate costs and trying to run a more streamlined organization, but still keeping stores open and servicing the shooting and hunting public, then good for them. Since I’m in our local Gander Mountain about once a week, I can tell you that at least here in Indiana, the local Gander hasn’t moved tactical flashlights to “camping”, and in fact is stocking more AR15 and other EBR style rifles than some of the dedicated “gunshops” in the area. Admittedly, that’s anecdotal data at best.

It’s fine that you’ve had better experiences at Gander, but I think all of the other evidence I linked to shows that they aren’t holding up in the industry very well and may, in fact, end up being a source “waste” in terms of economic resources.

Specific to Gander, I just don’t think it’s accurate to say a quarter in which they turned less than a million dollars in profit is a good sign when the other quarter you highlight was a loss of more than 5 million, and they’re only getting those profits by cutting back in a big way. It’s certainly an improvement, but if you’re going to use the store as a bellwether, there is key information missing.

The other thing I would look for in order to make the leap that their profitability is a sign of a rockin’ industry is what kinds of things they are selling to make that profit. In my post about Cabela’s on Sunday, I noted that the trends of removing more of the non-shotgun sports equipment out of stores and moving the tactical flashlights to camping aren’t good signs for those of us who are mostly gunnies. That essentially means more camping and hunting focused. There’s nothing wrong with serving those markets if they are more profitable, but it’s relevant to note before saying that both the shooting and hunting segments of the retail market are doing well.